What is an entity called that makes funds available for borrowing?

What is an entity called that makes funds available for borrowing?

• A. Borrower
• B. Lender
• C. Creditor
• D. Both Lender and Creditor

Answer: (D)

The correct answer is that an entity that makes funds available for borrowing is commonly referred to as both a lender and a creditor. A lender is a specific type of creditor that provides loans or credit to individuals or businesses with the expectation of being repaid in the future, usually with interest. This definition includes banks, credit unions, and other financial institutions that actively provide loans. On the other hand, the term creditor encompasses a broader range of entities that have the right to receive payment. This can include not only lenders but also sellers of goods on credit terms or any institution that extends credit to another party. Therefore, defining an entity as both a lender and a creditor captures the full scope of organizations or individuals that provide funds for borrowing.

The correct answer is that an entity that makes funds available for borrowing is commonly referred to as both a lender and a creditor.

A lender is a specific type of creditor that provides loans or credit to individuals or businesses with the expectation of being repaid in the future, usually with interest. This definition includes banks, credit unions, and other financial institutions that actively provide loans.

On the other hand, the term creditor encompasses a broader range of entities that have the right to receive payment. This can include not only lenders but also sellers of goods on credit terms or any institution that extends credit to another party.

Therefore, defining an entity as both a lender and a creditor captures the full scope of organizations or individuals that provide funds for borrowing.